The Monterrey Consensus: the conference on Financing for Development

The Conference on Financing for Development (FfD) ended on 22 March 2002 with the adoption by acclamation of the Monterrey Consensus by the heads of state and government in Monterrey, Mexico. The aim of the Conference had been to examine the internationally agreed development goals adopted during the past development decade, and especially the goal of halving the number of people living in absolute poverty by 2015, for their financial implications and to indicate ways of mobilizing the financial resources needed to achieve them.The Monterrey Consensus consists of a collection of non-binding and vague declarations of intent. The develop ing countries commit themselves to good governance, economic and social reforms and stability-oriented macro policies. When and on what scale is left open. Nor does the Monterrey Consensus refer to any targets for in- creasing domestic resource mobilization.The industrialized countries similarly failed to make any specific commitments in Monterrey. They refused to discuss the developing countries' trade demands, claiming that they fell within the WTO's terms of reference; the framework for debt rescheduling operations continues to be confined to the HIPC countries, and they accepted a substantial increase in ODA contributions only in principle, i.e. without any specific commitments or time frames. Only the USA's and EU's unilateral declarations at the time the Monterrey Consensus were adopted that they would increase their aid by US $ 12bn per annum from 2006 shines a more positive light on the Consensus. The reform of the international monetary, financial and trading systems was also reduced to a promise to im- prove cooperation among the existing international institutions.The Monterrey Conference certainly cannot be classed as an historic conference, but in many respects it did bring progress where the detail is concerned. This is especially true of the willingness shown by the governments of the developing countries during the Conference to accept that they are primarily responsible for their own economic and social development and of the industrialized countries' willingness in principle to give the devel- oping countries a greater say in the various international institutions. The Monterrey Consensus also calls for fresh action, for example, to increase ODA effectiveness, to achieve fairer burden-sharing during the manage- ment of international financial crises, to establish international insolvency law and to strengthen the role of the private sector.